Atopic dermatitis (AD) is the most common chronic inflammatory skin disease in the general population affecting 17% of children and nearly 3% of adults in the U.S. It is associated with significant morbidity and occupational disability. Recent studies have highlighted the importance of cytokine environment in the pathobiology of AD and Staphylococcus aureus colonization/infection contributing to the severity/exacerbation of this common disease. The skin of AD patients has significantly reduced epidermal barrier protein expression and low levels of antimicrobial peptide production, which result in abnormalities in the skin barrier function and antimicrobial host defense. In the majority of AD, these changes are caused by inhibition of epidermal keratinocyte differentiation. However, the molecular events that result in lack of keratinocyte differentiation in AD skin are poorly understood. The overall goal of this competing renewal of R01 grant application (5 R01 AR41256-25) will be to delineate the initial molecular and cellular events by which IL-4/IL-13 and IL-22, cytokines associated with AD skin environment, and staphylococcal toxins inhibit keratinocyte differentiation in AD skin leading to epidermal barrier abnormalities. Our new preliminary data indicates that both IL-4/IL-13 and IL-22 through different signaling pathways interfere with early differentiation events in keratinocytes by affecting Ca2+ signaling/mobilization, activating Wnt/beta-catenin pathway, while inhibiting Notch developmental pathway. We present evidence that staphylococcal lipoteichoic acid, LTA, selectively activates the expression of Notch- Regulated Ankyrin Repeat Protein, NRARP, that interferes with Notch pathway and inhibits the expression of early keratinocyte differentiation markers. Finally, we demonstrate that AD skin cytokine environment and staphylococcal products synergize and complement each other in the inhibition of keratinocyte differentiation. The specific aims of this proposal will be: 1) To establish the molecular mechanisms by which the immune response in AD skin alters differentiation of skin keratinocytes by examining gene and protein expression profiling in keratinocytes differentiated in the IL-4/IL-13 vs IL-22 vs IFNg environment; analyzing the role of the Ca2+- binding proteins, SMOC1 and STC2, regulated by IL-4/IL-13 in Ca2+ mobilization and signaling in keratinocytes; evaluating how interference with Ca2+ binding proteins expression and function may control early stages of keratinocyte differentiation and affect Wnt5a/beta-catenin signaling pathway in these cells. 2) To investigate the effects of staphylococcal toxins on keratinocyte differentiation In this aim, we will examine LTA interference with Notch signaling pathway, which controls keratinocyte differentiation. We will assess the role of LTA-induced NRARP in this process. 3) To investigate the synergistic effects of the AD immune response and staphylococcal LTA, on the keratinocyte differentiation program in vivo. We will assess keratinocyte differentiation program in the skin of AD patients in relationship to skin cytokine environment and colonization with S. aureus, examine transcriptional profile of different layers of keratinocytes in the skin by laser capture microdissection and RNAseq, evaluate keratinocyte differentiation in 3D organotypic skin cultures utilizing primary keratinocytes of AD patients and examine how differential expression of Ca2+ binding proteins SMOC1, STC2 and Notch regulating NRARP in these cultures influences keratinocyte differentiation. These studies will likely identify novel selective therapeutic approaches that can alter the keratinocyte differentiation program in AD skin at its earliest stages, providing the opportunity to restore and develop new approaches to enhance epidermal barrier function in AD.